We have been keeping a watchful eye on the Brexit negotiations so that we will be in a position to advise our clients on any accounting implications as they arise. One important area that may be impacted by shifting government priorities is Making Tax Digital and we wanted to pass on a recent statement from HMRC to you:
The introduction of the Making Tax Digital (MTD) service for VAT from April 2019 will be a major step towards HMRC’s ambition to become one of the world’s most digitally advanced tax authorities.
HMRC have had to make some tough choices about how we use our resources so we can be sure of delivering on our EU Exit responsibilities. We’re now at the point where we need to step up our internal preparations to make sure we’re ready for next March. In practical terms, that means putting skilled project teams onto this work straight away. I’m therefore writing to update you on what that means for MTD.
Delivery of MTD for VAT is continuing as planned, but we are slowing the IT delivery of some other elements of MTD relating to Income Tax and Corporation Tax. Work will continue to complete the Income Tax service for the million customers who are eligible to join and the pilot will remain open for those who wish to trial the service, but we will pause work to extend the service to cater for other customer types.
These changes do not impact our plans for VAT – the majority of customers with turnover above the VAT threshold will still be mandated to use the MTD for VAT service from April 2019 – and the continued prioritisation of the majority of MTD delivery in these challenging circumstance reflects the importance we and Ministers attach to it.
We look forward to continuing to work closely with you to ensure that businesses and agents experience a smooth transition to a more digital way of doing VAT.
Director, Making Tax Digital for Business Programme
As HMRC make clear, this does not affect the planned implementation of Making Tax Digital for VAT. From 1 April 2019, VAT registered businesses with taxable turnover above the VAT registration threshold will be required to transition to Making Tax Digital, keeping records in digital form and filing their VAT returns using software.
If you need any help with Making Tax Digital, please get in touch with one of the team at CB Reid.